November 05, 2019

A four-day work week at Microsoft boosts workers’ productivity

A four-day work week at Microsoft boosts workers’ productivity

In an experiment during August earlier this year, Microsoft offices in Japan were closed every Friday and full-time staff benefited from “special leave” which was paid. As a result, during the period in which staff worked a four-day week on full pay, sales were boosted by nearly 40%. While Japan as a country has some of the longest working hours in the world, during the trial meetings were restricted to a maximum of 30 minutes, and online discussions were championed, instead of face-to-face meetings.

IZA World of Labor contributor Jan Sauermann has written on the topic of performance measures and worker productivity. In his article he writes that choosing the right performance measures can inform and improve decision-making in policy and management. “In a general sense, productivity can be defined as the ratio between a measure of output and a measure of input. The productivity of workers could thus be measured as an output, e.g. sales or units produced, relative to an input, e.g. the number of hours worked or the cost of labor. […] Measures of worker productivity can give important insights into how workers perform and how workplaces should be organized,” Sauermann notes.

According to findings from a 2017 survey, nearly a quarter of Japanese companies had employees working more than 80 hours overtime every month, often unpaid. The August Work Life Choice Challenge this year was popular with 92% of the staff surveyed after the event. As a result of the experiment, electricity consumption was reduced by 23% and paper printing by 59%. Microsoft has since announced that it is planning a second Work Life Choice challenge this winter but staff will not be able to benefit from the same “special leave.” Instead, staff would be encouraged to take time off to “rest smartly.”

Peter Dolton, also an IZA World of Labor contributor, has examined working hours in the past, present, and future. “Looking ahead, the question of how reducing working hours will affect productivity is significant. In addition, how individuals divide up their leisure and work time and what the appropriate work−life balance is in an increasingly technological future are important concerns,” Dolton notes in his article.

In contrast, Jack Ma, co-founder of the Chinese multinational conglomerate holding company Alibaba, is championing 12-hour working days. In April 2019, Ma described the 09:00–21:00 working pattern as “a blessing.” However, Dolton has consulted the statistics behind increasing working hours and there doesn’t seem to be a correlation with an increase in output. “Evidence based on data from 18 manufacturing sectors in the US between 1956−1991 shows that increasing overtime hours by 10% reduces output by around 2−4%. Although this study is econometrically limited, it is suggestive of structural issues associated with modeling the link between hours of work and aggregated output,” Dolton writes.

Read Jan Sauermann‘s article Performance measures and worker productivity and Peter Dolton’s article Working hours: Past, present and future